SBC: IPTV's Day Has Come

LAS VEGAS -- NAB2005 -- The RBOCs have tried IPTV before and failed, but SBC Communications Inc. (NYSE: SBC) told broadcasters here this week that it's an idea whose time has come.

“So why now?” asked Jeff Weber, SBC's VP of product and planning for Project Lightspeed. “I’ve already been asked this question a thousand times and it’s already come up today: 'The telcos have been down this path before -- what is it that makes you think that SBC can pull it off this time?' ”

Weber’s fellow panelist, Steve Hawley of Seattle-based IPTV consultants Advanced Media Strategies, raised the point just minutes earlier. “The telephone companies were doing this as long as 12 to 15 years ago," Hawley noted. "Some of you may remember the Bell companies' video-on-demand trials back in 1993.”

One example: Pacific Bell (now part of SBC), said in 1993 it would spend $16 billion to hook up 5 million homes to a fiber optic "information superhighway" that would provide multimedia programming, video on demand, and support videophones by the year 2000. California residents are still waiting for those videophones, by the way.

But Weber says that past failures aren't indicative of future projects. "At the highest level, the economics look dramatically different today than they did ten years ago,” he claims.

“The improvements in compression technology, the ability to do switched video instead of broadcast video, the technology development on a scale around the world makes [IPTV] real. As these standards evolve -- and I think SBC can help provide that -- the scale and the economics come down, driving the deployment costs [down].

“Because we don’t have to take fiber all the way to the house to enable video into the house, rather than spending $40 billion dollars, we can spend four, five, or six billion dollars."

And Weber didn’t fail to mention the defensive motivation behind SBC’s IPTV effort: “The competitive environment is meaningfully different than it was 10 years ago -- wireless has taken a meaningful share of our total voice business, which we all know cable is getting in.”

For the most part, broadcasters and other content creators here say they're excited about the entry of telcos into IPTV, because it creates a new, competing distribution channel. They say IPTV will give broadcasters more leverage when negotiating content licensing agreements with cable and satellite players (see MSOs Yawn at Lightspeed).

Weber then progressed to the “slideware” portion of his presentation. He displayed several mock-ups of SBC’s Project Lightspeed interface, which included a rough-looking interactive channel guide, a box for chat, and an IPTV content panel. Another slide displayed user interaction services like photo and music file sharing with chat (see Inside SBC's IPTV Factory).

SBC says it will indeed spend between four and six billion dollars to deliver the fiber optic cable needed for IPTV and other services to 18 million U.S. homes. The fiber will give SBC customers connection speeds of 25 Mbit/s to 30 Mbit/s, Weber says.

Interestingly, he says SBC will not attempt to compete on price. “That is not where we think we can demonstrate our value to the marketplace. We’re going to have a superior product, and we want to be priced accordingly...

Whatever the motivation, SBC believes that the revenue opportunities in IPTV are substantial. “There’s upside, there’s real revenue, and we can do it because of the economics in a way that makes sense. The time is right -- that much is clear.”

I've never been to Hong Kong and I haven't verified it for myself, but according the the following article, symmetric 1Gbs is being offerred to 800,000 households in Hong Kong for $215 per month.

Hong Kong Broadband Launches 1 Gbps Home Service for US$215/month

Hong Kong Broadband Network (HKBN) officially launched its 1 Gbps symmetric service for the residential market. Approximately 800,000 households, out of a total of 2.2 million households in Hong Kong, are wired to receive the service. The 1 Gbps symmetric service is priced at US$215 per month.

HKBN noted that its 1 Gbps service is up to 166x faster downstream and 1,950x faster upstream than the advertised bandwidth of the incumbent's ADSL service.

HKBN Premium bb1000 service is being offered on the same metro Ethernet infrastructure that delivers the company's Mass Market bb100 (symmetric 100 Mbps for US$34/month) and Entry Point bb10 (symmetric 10 Mbps for US$16/month) services.

re: SBC: IPTV's Day Has Come Its a shared 1 Gb/s connection to the building. 1 Gb/s to the home is a GigE at least to the CO.

Hmmm, by your definition a cable company provides zero bandwidth because they don't connect to a CO at all! That's obviously wrong ;-)

It does beg the question about how to define end/end bandwidth, as well as price access speeds, when using a modern, statistically multiplexed, communications infrastructure. It seems best to me if the municipal bandwidth utilities measure and price things in terms of gigabytes/month. This would give incentive to actually improve the infrastructures as opposed to using the infrastructure to dole out bandwidth scarcity.

re: SBC: IPTV's Day Has Come I think you obfuscated the point and then changed topics.

My issue is that you are declaring a bit rate on an access line as the determining factor of "real broadband". In fact, that is not even the small picture. Start with allocated bandwidth per headend system. You might find today's DSL systems in the US are as good as any system around.

Marketing by the end bit pipe speed is an interesting phenonmenon but not very relevant to what you advocate.

re: SBC: IPTV's Day Has Come I think you obfuscated the point and then changed topics.

I was trying to move past legacy telco TDM models and move forward to solving the problems of deploying modern, statistical multiplexing, networks.

My issue is that you are declaring a bit rate on an access line as the determining factor of "real broadband".

I see that as partial factor.

I think the overall definition would be a system that maximized the diffusion of information and knowledge. That means building a system that rewards those who make bandwidth and connectivity to be an abundant resource. It would also adhere to end/end principles.

Start with allocated bandwidth per headend system.

This seems like a failed starting point. Nobody knows where the "headend" system will be (unless we're always looking to history.)

Why not start with providing as much bandwidth and connectivity as modern technology allows?

You might find today's DSL systems in the US are as good as any system around.

I do not find that to be true. And even if it were, I still know it is not good enough.

Marketing by the end bit pipe speed is an interesting phenonmenon but not very relevant to what you advocate.

It's only a piece of the puzzle. I'm ok with it if it works. It's not that much different than marketing water connections by meter size. That does give some indication about the service provided.

re: SBC: IPTV's Day Has Come First Four Campaign Platforms (please add)

1. Fix our unemployment problem by putting 10M unemployed workers to work digging trenches for muni broadband networks.2. Raise US tax rate to 75% to create a national committee to fight republican propaganda.3. Redefine the USF to make hi-def porn available to every man, woman, child, and mammal.4. Close the NYSE! All stocks are now traded on ebay!

re: SBC: IPTV's Day Has Come Actually statistical multiplexing is your problem rj. We have plenty of that already and that is my point. The applications that people describe require the ELIMINATION of statistical multiplexing. Until that is done, you have your fraudband.

So, go on whining...I want it to be better. Then form a carrier and deploy your great network. Until then you are a whiner.

re: SBC: IPTV's Day Has Come Actually statistical multiplexing is your problem rj. We have plenty of that already and that is my point. The applications that people describe require the ELIMINATION of statistical multiplexing. Until that is done, you have your fraudband.

Seven; the world of engineering is based on probabilities. Eliminating this "reality" doesn't bring the "certainty" you seem to be looking for. In network engineering, the elimination of probabilities from the models makes for poor designs.

So, go on whining...I want it to be better. Then form a carrier and deploy your great network. Until then you are a whiner.

The current sticking point seems to be one of finance. Bankers tell me that the revenue bonds must be backed by something other than pro forma income statements of the fiber utility. Sadly, I don't have a solution to this problem and I'm not wealthy enough to back the projects myself.

Since I don't want to be a victim, I use the little power I do have in hopes to make things better. I use my voice and speak out as honestly as I can. You and others may see that as whining. I see it as someone searching for the power to make a difference.

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